Challenges in Dairy Industry: Culling Trends and Heifer Shortages Impact Herd Dynamics
Source: The DairyNews
Dairy producers faced formidable challenges during the summer, grappling with elevated beef prices and narrowing profit margins, leading to substantial culling of herds. Although the situation has somewhat ameliorated since then, the dairy herd continued to contract in September.
Sarina Sharp, an analyst with the Daily Dairy Report, points out that the reduced availability of heifers to replace slaughtered milk cows may be contributing to the slowing cull rates. USDA's semi-annual Cattle report, released in July, revealed that as of July 1, only 3.65 million dairy heifers were poised to enter the national herd—marking the lowest mid-year number since 2004.
The USDA's monthly Livestock Slaughter reports indicate a significant increase in cow slaughters between January and August, with 121,700 more cows sent to packinghouses compared to the same period in 2022. Despite the decline slowing and even reversing as milk prices improved and feed costs receded, the U.S. milk cow herd still experienced a 0.3% reduction, equivalent to 32,000 cows.
Sharp explains that the slowdown in cull rates during the fall is a result of improved milk prices and reduced slaughter rates over the summer, driven by fewer cows with health issues or low milk yields remaining in the herd. In September, dairy cow slaughter volumes were notably lower than the previous year, reaching the lowest level for any September since 2014.
However, the analyst highlights that dairy producers have been curbing cull rates primarily to maintain stable headcounts. While the industry saw a period of intense culling and the influx of heifers through August, there is now a noticeable decrease in operations closing, and the supply of heifers for sale has dwindled, as evident in the USDA's Cattle report.
Looking ahead, Sharp anticipates that while the dairy herd contraction may slow down, the scarcity of heifers will impede rapid growth in the U.S. milk-cow herd throughout the coming year. The intricate interplay of factors within the dairy industry continues to shape the dynamics of herd management.
The USDA's monthly Livestock Slaughter reports indicate a significant increase in cow slaughters between January and August, with 121,700 more cows sent to packinghouses compared to the same period in 2022. Despite the decline slowing and even reversing as milk prices improved and feed costs receded, the U.S. milk cow herd still experienced a 0.3% reduction, equivalent to 32,000 cows.
Sharp explains that the slowdown in cull rates during the fall is a result of improved milk prices and reduced slaughter rates over the summer, driven by fewer cows with health issues or low milk yields remaining in the herd. In September, dairy cow slaughter volumes were notably lower than the previous year, reaching the lowest level for any September since 2014.
However, the analyst highlights that dairy producers have been curbing cull rates primarily to maintain stable headcounts. While the industry saw a period of intense culling and the influx of heifers through August, there is now a noticeable decrease in operations closing, and the supply of heifers for sale has dwindled, as evident in the USDA's Cattle report.
Looking ahead, Sharp anticipates that while the dairy herd contraction may slow down, the scarcity of heifers will impede rapid growth in the U.S. milk-cow herd throughout the coming year. The intricate interplay of factors within the dairy industry continues to shape the dynamics of herd management.
